Podcast Summary

Podcast: The Directions on Microsoft Briefing Podcast
Episode: What Microsoft's Recent M365 Bundling Moves Mean for You
Date: January 8, 2026
Host: Mary Jo Foley (A)
Guest: Wes Miller (B), Directions on Microsoft Analyst

Episode Overview

The episode explores Microsoft's recent changes to feature bundling and pricing in its M365 suites, focusing particularly on the implications of integrating Intune features into M365 E3 and E5, the shelving of a rumored “E7” tier, and what these developments mean for enterprise customers. The discussion delves into value assessments, licensing complexities, "batteries not included" features, and the future of Microsoft’s product and add-on structure.

Key Discussion Points & Insights

1. The Myth and Reality of an M365 "E7" Suite

• For years, speculation existed about a more premium "E7" suite that would incorporate expensive add-ons like Microsoft 365 Copilot ($30/user/month), but recent bundling changes suggest E7 isn’t coming soon.
• Instead of creating an E7, Microsoft restructured existing plans to fold in select premium features, challenging previous customer expectations.
  • "But late last year, Microsoft started shuffling the E3 and E5 decks in a way that made an E7 look less likely, at least for the near term." (A, 01:27)

2. Bundling of Intune Features with E3/E5 and Pricing Changes

• Microsoft is now including previously separate Intune Plan 2 and Intune Suite features directly in Microsoft 365 E3 and E5.
• Intune had been an add-on, limiting its uptake due to both licensing complexity and cost, especially as many customers stick with E3 rather than E5.
  • "What we really saw Microsoft do was almost, it's a thing we rarely see them do, which is put some money back on the table and take these features and shove them down into the two layers of Microsoft 365 E3 and E5." (B, 03:45)

Price Increases

• M365 E3 increases from $36 to $39 per user/month; E5 from $57 to $60.
• This “value add” comes with mandatory price increases—customers get the new features whether they want them or not.
  • "E3 is going to cost $39 instead of $36 and E5 will cost 60 instead of $57. But you do get these new intune features you're talking about and co copilot Chat if you care about that. But not Microsoft 365 copilot itself, which still stays $30 per user per month." (A, 04:37)

Evaluating the Value

• Customers are advised to reassess their licensing:
  • For many, the value of included features exceeds the $3 price bump.
  • E5 remains a tough sell for many due to its higher price and the prevalence of third-party alternatives for included features.
    • "There's more than $3 worth of value that Microsoft put in. And the same is true of E5 when we look at that." (B, 05:42)
    • "...E5 is going to be something that a lot of customers are going to kick the tires and walk away from..." (B, 06:07)

3. Eligibility Caveats and Limitations

• Additions are exclusive to Microsoft 365 E3 and E5:
  • Excluded: Academic, government, and frontline users; standalone E5 security/compliance suites (e.g., Defender or Purview).
  • Intended to drive full-suite adoption over piecemeal licensing.
    • "These are purely being added to Microsoft 365 E3 and E5. None of the Office suites, none of the Frontline suites, and none of the standalone." (B, 06:50)
    • "Microsoft is clearly using this as a negotiation gambit. Listen, there's more value in the box, but you can't buy piecemeal for now." (B, 07:09)

4. Feature Deep-Dive

Newly Bundled Features and Their Impact

• Remote Help: Useful, though mature alternatives exist; inclusion makes trialing it much easier.
• Advanced Endpoint Analytics: Added value, though historically sold at a premium.
• Additional Plan 2 Intune features: Matter most to organizations with embedded device users.
• E5-Specific: Endpoint Privilege Management
  • Raises the competitive bar vs. leaders like BeyondTrust; may be “good enough” for some, though not as comprehensive.
    • "Endpoint privilege management in particular... All of that's in E5 now... I still think BeyondTrust today... is much more comprehensive than Microsoft's but I think this may be good enough for a lot of customers..." (B, 11:06)
• Cloud PKI: No longer restricted to those willing to pay high add-on fees.
• Value primarily benefits traditional, device-affinity users, not shared-device (frontline) scenarios.

5. The “Batteries Not Included” Paradigm

• Microsoft has long withheld some high-value features from E3/E5, selling them as add-ons (e.g., Defender, Intune Suite, Purview).
  • "At directions. We have this concept that we call batteries not included... I'm curious if you think this new announcement by Microsoft about Intune features coming to E3 and E5 means the batteries not included era is over." (A, 12:46)
• Wes's take:
  • Trend toward streamlining and harmonization, but the “batteries not included” approach isn’t entirely going away—just possibly reduced.
    • "...we're going to start to see some streamlining that's actually beneficial for customers. That said, this year's uplift is probably the first we'll see of, you know, maybe another price change in another two, definitely three years. But I think this could be the start of a positive move. There'll still be batteries not included, but hopefully we're going to see that become less of a problem over time." (B, 13:35)

6. The Copilot Example and Future of Agents/Add-ons

• Microsoft 365 Copilot add-on remains premium-priced at $30/user/month; Copilot Chat features now included in E3/E5.
• Future agents (e.g., Researcher, Analyst) may sporadically be bundled, but add-ons will likely remain for major new capabilities.
  • "I'm thinking we're going to see other agents from Microsoft still be priced as separately priced add ons. But I'm wondering if you agree and kind of what you're expecting around Microsoft's agent licensing and pricing this year and beyond." (A, 14:23)
  • "There's a lot of stuff being added all over the place and I think they're just, they're trying to make it more appealing because Copilot is, it's got to be a hard sell for them right now, again, especially with all the Copilot chat value they're throwing in the box." (B, 15:18)

Notable Quotes & Memorable Moments

• “Where Microsoft giveth, Microsoft taketh away.” – Wes Miller (B), re: bundling features and raising prices (03:56)
• “You get these features whether you want them or not and you have to take the price increase.” – Mary Jo Foley (A) (04:55)
• “Most of the features that we're talking about here...really add value. If you have a user tethered to a PC...” – Wes Miller (B), on the relevance of new features (09:52)
• “This is going to be one of those things where it's really hard to UNBUNDLE Microsoft.” – Wes Miller (B), on inclusion of Remote Help in E3 (11:00)
• “The ‘batteries not included’ era...I'm not sure it's over...But I think particularly...with all this AI movement, I think we're going to see a lot of harmonization.” – Wes Miller (B) (13:23)
• “Copilot is, it's got to be a hard sell for them right now, again, especially with all the Copilot chat value they're throwing in the box.” – Wes Miller (B) (15:26)

Timestamps for Important Segments

| Timestamp | Segment | Content Summary | |-----------|---------------------------------------------|-----------------------------------------------------------| | 00:00-02:05 | Introduction & E7 Myth | Rumors around E7, Copilot pricing, podcast goals | | 02:07-04:21 | Intune Bundling Announcement | Details on Intune bundling, problems with adoption, price moves | | 04:21-06:28 | Price Increases and Value Assessment | Price hike details, examining ROI on new features | | 06:28-07:23 | Eligibility and Exclusions | Which suites get new features, and which do not | | 09:32-12:45 | Practical Impact for Different User Types | Relevance to PC-tethered users, value of new features | | 12:45-13:23 | “Batteries Not Included” Discussion | Microsoft’s add-on strategy, future of bundling | | 14:23-15:45 | Copilot and Future Licensing | Copilot Chat, future of agent add-ons and bundling |

Conclusion

The Microsoft M365 bundling changes are a “good news, bad news” story:

• Good news: More value and simplicity in base E3/E5 with the inclusion of previously premium add-ons.
• Bad news: Across-the-board price increases, exclusion of some user groups, and continued use of add-ons for certain features. Both experts suggest customers use this as an opportunity to re-evaluate their licensing choices in light of the new suite compositions and to watch for future streamlining efforts as Microsoft reacts to AI-driven pressures and customer feedback.